Stock Spams and Scams

Stock Spams and Scams

You may have received "spam" or junk email recommending you invest in a stock, perhaps even invest in that stock before it is first publicly offered for sale in an Initial Public Offering (IPO).

There are now federal and states laws designed to protect consumers from misleading and unwanted spam. There are also regulations on the content of these messages that involve securities and what the senders must tell you. In spite of these laws and regulations, stock spams continue to pose a risk to investors. This Investor Alert explains how to spot and protect yourself from spam problems.

What is Spam?

Spam is unsolicited electronic mail sent to a large number of addresses, usually advertising some product, service, business, Web site, scheme, or strategy. Stock spams are the electronic equivalent of a boiler room sales operation in which someone who doesn’t know you tries to sell you securities, like penny stocks, or puts aggressive—and suspect—messages on an electronic message board to spur your interest in a company.

This article features: Problem Spams NASD Has Seen, Spotting Problem Spam and what to do If You Get Spammed.

NASD maintains Smart Bond Investing, an online learning center that provides a wealth of information about bonds and bond investing, along with easy access to real-time corporate and municipal bond prices and the day's most active corporate bonds. In addition to covering the basics of bond maturity, yield and pricing, Smart Bond Investing offers sections on dealing with risk; how bonds are bought and sold; an overview of the corporate, municipal and government bond markets, and a look at the various types of individual bonds and bond mutual funds.   (Click above on Smart Bond Investing to go there).

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